India vs China trade boycott: Haryana government annuls tenders of two Chinese firms worth $100 million or ₹780 crores
The Galwan Valley incursion by the Chinese PLA has kickstarted started a trade war between India and China. The Indian popular opinion is that the Indian government should boycott all Chinese products being sold in India. Obviously that can’t be done as India is a signatory to World Trade Organization (WTO) and other trade pacts and any effort to boycott Chinese goods would encompass tit-for-tat moves and sanctions.
However, given the popular mood and outright anger at China, the state governments are doing their bit to cancel/annul tenders that are awarded/are in a process of being awarded to Chinese firms. Since the Indian state governments are not under the purview of any agreement signed by the Indian central government, they can get away with it. One such state is Haryana.
The Haryana government has decided to put in effect a trade ban on Chinese companies by annulling two tenders for installation of flue gas de-sulphurization (FGD) system at their thermal power plants in Hisar and Yamunanagar. The combined value of these two tenders was about $100 million or ₹780 crore.
The two canceled contracts would have been awarded to the lowest bidders which incidentally was Chineses state organizations. According to the state authorities, the lowest bidders (L-1) for both the tenders were Chinese firms – Beijing SPC Environment Protection Tech for Yamunanagar power plant and Shanghai Electric Corporation for the Hisar power plant.
The officials said that now they are going to call for fresh tenders with one pre-condition. The companies interested in the contract should be registered in India.
We are going for a fresh tender with changed conditions. Only companies registered in India will be eligible to participate as per the terms and conditions of the new tender.
Haryana state government official
The Galwan valley incursion may prove quite costly for China. The Chinese economy already beaten up by the coronavirus pandemic is also suffering from a trade war with the United States. The U.S. has already banned U.S. firms from exporting tech to the Chinese multinational Huawei and President Trump is pushing for a more equal trade status to U.S. firms vis-a-vis China.
India imports goods and services worth ‘$84 billion from China and even a drop of 50% will make a huge impact on the already dented Chinese economy. Indian Railways has already canceled two contracts with state-owned Beijing National Railway Research worth $60 million or Rs.471 crores on Friday.
The Indian central government is also heeding to the popular disgust at the Chinese incursion and has asked Industry bodies to identify goods and services which are imported from China and can be effectively blocked.
In line with the decision taken at the highest levels of the government to reduce our dependence on China, the DPIIT (Department for Promotion of Industry and Internal Trade) has reached out to trade associations, seeking a list of items imported from China ranging from automobiles, pharmaceuticals, toys, plastics, furniture etc by Monday.
Senior government official told ET.